El Monte to spend roughly $100,000 to place `soda tax' on special election ballot

EL MONTE - The city is spending upwards of $100,000 in its effort to tax sugary beverages to boost revenues and fill city coffers.

According to Finance Director Julio Morales, El Monte spent $60,000 to place its sugar-sweetened beverage tax - Measure H - on the Nov. 6 special election ballot. And the city expects to spend an additional $41,000 to defend itself in litigation related to Measure H, according to Senior Deputy City Attorney Dave Gondek.

Backed by attorneys from the American Beverage Association, El Monte Planning Commissioner Art Barrios in late August filed a lawsuit contesting the initiative's ballot language and title.

A judge earlier this month ruled in his favor, finding that the original wording was "biased and false or misleading," and forced El Monte to change the language.

The ballot measure, which would charge businesses one cent for every ounce of sugar-sweetened beverages they sell, has faced criticism from some residents. And now critics are frustrated the city is spending general fund dollars to fund something they say has little popular support.

"That is totally ridiculous, especially when we don't have the money," resident Joe Anthony Garcia said of the costs associated with Measure H. "They're fighting a losing cause because they're not going to win anyway. They're going to spend the money on something that's never going to happen."

The City Council in July unanimously approved putting the measure on the November ballot.

But even that support is slipping.

Councilwoman Victoria Martinez publicly announced her opposition to Measure H at last week's council meeting. She initially voted in favor of placing the tax proposal on the ballot, but "upon further evaluation," there are "many unintended consequences," she said.

"This is a tax on more than 700 sugar-sweetened beverages," Martinez said. "It's very unattractive to new businesses, and it will negatively affect businesses who choose to do business in El Monte."

Martinez is also concerned about how the city will administer and collect taxes.

Mayor Andre Quintero said that even if the soda tax doesn't pass, the city's resources were well spent.

"Any time you can get information from voters about their commitment to funding the government, whatever the outcome is (is) helpful," he said.

El Monte has not conducted a poll to evaluate the likelihood of the soda tax initiative passing, Quintero said. However in March, the city did conduct a survey to gauge residents' interest in extending the city's Measure GG half-cent sales tax for three additional years.

That measure, which produces $3.4 million in general fund revenue every year, is due to sunset in 2014. Council members voted against asking residents to extend the measure until 2019 following vehement opposition from the community.

Later, Quintero introduced the soda tax measure, touting it as a means to curb the city's high obesity rates while addressing long-term structural budget deficits.

The initiative is modeled after a measure introduced in the Bay Area city of Richmond.

Without the additional revenue, El Monte officials have painted a bleak financial future. The city faced a $2.3million budget deficit this current fiscal year, but plugged the hole largely with a 6.5 percent cut across all city departments. However, city leaders say they need to address long-term budget hurdles posed by deferred salary increases, plummeting sales tax revenues and the expected rise in employee and retiree medical costs.

If voters approve the soda tax, it could generate between $3 million and $7 million annually in general fund revenue, according to city estimates.

The City Council's July decision to hold a special election came packaged with a resolution declaring a fiscal emergency in El Monte - a requirement to justify the election during a non-regularly scheduled election year.